习题与答案 C HA PT E R 1 The Science of Macroeconomics Questions for Review 1.Explain the difference between macroeconomics and microeconomics.How are these two fields related? 1.Microeconomics is the study of how individual firms and households make decisions,and how they interact with one another.Microeconomic models of firms 0 are based on principles of optimization -firms and households do the best they can given the constraints they face. For example,households choose which goods to purchase in order to maximize their utility,whereas firms decide how much to produce in order to maximize profits.In contrast,macroeconomics is the study of the economy as a whole;itf cuses issu s such ow total outpu tal employment,and the overall price level are determined.These economy-wide variables are based on the interaction of many households and many firms;therefore,microeconomics forms the basis for macroeconomics. 2.Why do economists build models? 2.Economists build models as a means of summarizing the relationships among economic variables.Models are useful because they abstract from the many details in the economy and allow one to focus on the most important economic connections. 3.What is a market-clearing model?When is the assumption of market clearing appropriate? 3.A market-clearing model is one in which prices adjust to equilibrate supply and demand.Market-clearing models are useful in situations where prices are flexible.Yet in many situations,flexible prices may not be a realistic assumption. For example,labor contracts often set wages for up to three years.Or,firms such as magazine publishers change their prices only every three to four vears. Most macroeconomists believe that price flexibility is a reasonable assumption for studying lo 2-ru ove ong run,prices ond to demand or supply,even though in the short run they may be slow to adjust. Problems and applications 习题与答案 C H A P T E R 1 The Science of Macroeconomics Questions for Review 1.Explain the difference between macroeconomics and microeconomics.How are these two fields related? 1.Microeconomics is the study of how individual firms and households make decisions, and how they interact with one another.Microeconomic models of firms and households are based on principles of optimization—firms and households do the best they can given the constraints they face. For example,households choose which goods to purchase in order to maximize their utility,whereas firms decide how much to produce in order to maximize profits. In contrast,macroeconomics is the study of the economy as a whole; it focuses on issues such as how total output,total employment,and the overall price level are determined.These economy-wide variables are based on the interaction of many households and many firms;therefore,microeconomics forms the basis for macroeconomics. 2.Why do economists build models? 2. Economists build models as a means of summarizing the relationships among economic variables.Models are useful because they abstract from the many details in the economy and allow one to focus on the most important economic connections. 3.What is a market-clearing model?When is the assumption of market clearing appropriate? 3.A market-clearing model is one in which prices adjust to equilibrate supply and demand.Market-clearing models are useful in situations where prices are flexible.Yet in many situations,flexible prices may not be a realistic assumption. For example, labor contracts often set wages for up to three years.Or,firms such as magazine publishers change their prices only every three to four years. Most macroeconomists believe that price flexibility is a reasonable assumption for studying long-run issues. Over the long run,prices respond to changes in demand or supply,even though in the short run they may be slow to adjust. Problems and Applications